Long-Term U.S. Petroleum-Based* Gasoline and Middle Distillate Needs Shift with Policy
•Crude-Based excludes ethanol, biodiesel, and distillate from coal-to-liquids and biomass-to-liquids.
•Source: AEO 2009 Reference Case, April 2009
Million Bbls Per Day
2008
2023
Change
Gasoline & E85 Demand
8.99
9.21
0.22
Ethanol
0.63
1.43
0.80
Crude-Based Gasoline
8.36
7.78
-0.58
Middle Distillate Demand (Jet + Dist.)
5.48
6.43
0.95
Biomass, CTL, BTL
0.05
0.41
0.36
Crude-Based Distillate
5.43
6.02
0.59
S
S
SIn the next 15 years, we see a significant shift in demand for petroleum-based gasoline versus distillate that is the result of recent U.S. legislation:
–The Energy Policy Act of 2005 included a mandated use of renewable fuels, and ethanol was the only fuel that could practically meet the mandate.  The increased use of ethanol requires less petroleum-based gasoline to meet  demand.
–The Energy Independence and Security Act of 2007 increased the renewable fuel mandate, requiring even more ethanol blending.  In addition, the legislation increased light-duty vehicle efficiency standards, which reduces the future need for gasoline demand.

SWhile still not the shift that Europe has seen, U.S. refiners will be facing a significant change in product mix that will impact investments.
–Overall liquid fuel demand is not expected to grow much over the next 30 years – perhaps about 0.2% per year (annual average) as shown in EIA’s 2009 outlook.
–But distillate demand may still grow fairly strongly, while gasoline demand declines; however distillate growth needs to recover from the recession’s impact before that occurs.

SThe increased use of biofuels and increased light-duty vehicle efficiency standards result in a decline in petroleum-based gasoline of about 580 thousand barrels per day (7%) from 2008 to 2023.

SPetroleum-based distillate, on the other hand, continues to grow (590 thousand barrels per day or 11%).  Increased use of biodiesel, distillate from coal-to-liquids (CTL) and from biofuels-to-liquids (BTL) processing is decreasing the petroleum distillate need by 360 thousand barrels per day.  If that non-petroleum-based distillate does not materialize, petroleum-based distillate requirements might increase substantially more than what is shown in the table.